Daybreak Holiday: November Jobs, Oil Volatility, Antitrust Under Trump

Thank you so much for joining us on this special 0:00:04.320 --> 0:00:08.600 edition of Bloomberg Daybreak. Happy Thanksgiving everybody. US markets are 0:00:08.920 --> 0:00:12.080 closed for this holiday. I'm Nathan Hager. Coming up this hour. 0:00:12.160 --> 0:00:14.000 We will take a look at the oil market at 0:00:14.000 --> 0:00:17.200 the end of a volatile year dominated by conflict in 0:00:17.320 --> 0:00:20.200 Ukraine in the Middle East. Where could prices go under 0:00:20.200 --> 0:00:23.720 the incoming Trump administration. We'll ask Stephen Shork, the founder 0:00:23.720 --> 0:00:26.360 and president of the Short Group. Plus what about all 0:00:26.360 --> 0:00:29.680 the anti trust litigation against big tech? Will that be 0:00:29.760 --> 0:00:33.199 headed in a different direction? After January twentieth, Jennifer Ree 0:00:33.240 --> 0:00:35.440 will join us for insights. She is a senior analyst 0:00:35.440 --> 0:00:39.960 of antitrust litigation at Bloomberg Intelligence. First, we focus on 0:00:40.080 --> 0:00:42.720 the economy. Next week we get the jobs report for 0:00:42.760 --> 0:00:45.199 the month of November. That's ahead of the Federal Reserve's 0:00:45.360 --> 0:00:48.560 final rate decision to close out twenty twenty four. For 0:00:48.680 --> 0:00:50.920 more and what to expect there, we are pleased to 0:00:51.080 --> 0:00:55.760 open up a special Thanksgiving roundtable today. City US economist 0:00:55.800 --> 0:00:58.880 Veronica Clark is with us along with Jennifer Lee, senior 0:00:58.880 --> 0:01:01.960 economist at BMO Capital Markets. It's great to have both 0:01:01.960 --> 0:01:04.480 of you with us here on the holiday. While we 0:01:04.600 --> 0:01:07.200 tuck into the Turkey. I guess we've had a chance 0:01:07.240 --> 0:01:10.399 now to digest the feast of data we got just 0:01:10.520 --> 0:01:13.880 before this holiday. So veronic all open things up with you. 0:01:14.160 --> 0:01:16.680 What is all the data we've seen so far tell 0:01:16.720 --> 0:01:20.000 you about where things could be headed for this economy? 0:01:20.280 --> 0:01:22.680 Yeah? Yeah, Happy Thanksgiving everyone. Yeah, we got a lot 0:01:22.720 --> 0:01:26.440 of data before the Thanksgiving holiday. I don't think necessarily 0:01:26.480 --> 0:01:29.920 anything that changed the backdrop too much. We had GDP 0:01:30.040 --> 0:01:32.840 revisions which did not show any real revision to two 0:01:32.880 --> 0:01:35.279 Q three GDP. You know'm still rising at a healthy 0:01:35.280 --> 0:01:39.759 two point eight percent. Some software manufacturing data durable goods orders, 0:01:39.800 --> 0:01:43.920 but we know that manufacturing is in modest contraction. Initial 0:01:43.959 --> 0:01:47.280 jobless claims which remained very low, but continuing job with 0:01:47.360 --> 0:01:49.400 claims which are rising, and I do think that is 0:01:49.440 --> 0:01:52.560 telling a pretty consistent story of a labor market that 0:01:52.760 --> 0:01:55.960 is weakening. We do see that layoffs are very low, 0:01:56.040 --> 0:01:58.320 but hiring is also very low, and so if you 0:01:58.800 --> 0:02:01.880 are losing your job, you're not quickly getting rehired. We 0:02:01.920 --> 0:02:04.559 do think that that results in more labor market weakness 0:02:04.760 --> 0:02:06.360 in the data next week. Of course, that's going to 0:02:06.360 --> 0:02:07.640 be the most important for the FED. 0:02:08.080 --> 0:02:10.480 Jen how about you. I mean, it does seem like 0:02:10.520 --> 0:02:13.920 this economy continues to show signs of resilience, even if 0:02:13.960 --> 0:02:16.040 we are starting to see those little bits of pockets 0:02:16.040 --> 0:02:17.359 a weakness in the labor market. 0:02:17.840 --> 0:02:20.440 Yes, Ron, I could put it all perfectly. Just want 0:02:20.480 --> 0:02:22.359 to point out, especially on the US consumer, which is 0:02:22.360 --> 0:02:25.280 obviously the most important component of the overall US economy. 0:02:25.720 --> 0:02:29.120 US consumer is still going I'm want to say strong, 0:02:29.200 --> 0:02:32.119 even though we saw softer real spending of just up 0:02:32.120 --> 0:02:34.480 point it was just up point one percent, But the 0:02:34.480 --> 0:02:36.880 fact that they still have gas in the tank or 0:02:36.960 --> 0:02:38.640 still have you know, juice in the battery, whatever you 0:02:38.639 --> 0:02:40.799 want to put it, they're still you know, we're still 0:02:40.840 --> 0:02:44.440 seeing a steady increase in wages and salaries, which is 0:02:44.440 --> 0:02:46.400 the most important part of personal income. It's like half 0:02:46.440 --> 0:02:48.480 of overall personal income. So that was at like point 0:02:48.639 --> 0:02:51.040 five percent, which has been just in line with the 0:02:51.080 --> 0:02:52.760 average that we've seen over the past year. So they 0:02:52.760 --> 0:02:55.480 are still making a decent salary, which is what I 0:02:55.520 --> 0:02:58.120 think is the most important to the saving rate. A 0:02:58.120 --> 0:03:01.119 little bit from that two year low in the prior month. 0:03:01.520 --> 0:03:03.040 So even though they're taking a little bit of a 0:03:03.040 --> 0:03:05.880 break in October, there's still the means to spend. They're 0:03:05.919 --> 0:03:07.720 just not going to spend it all in one place 0:03:08.160 --> 0:03:10.040 and not every single month. And that's still okay. 0:03:10.160 --> 0:03:12.000 I want to get into that spending in just a 0:03:12.000 --> 0:03:15.440 little bit, particularly since we're heading into Black Friday, getting 0:03:15.440 --> 0:03:17.960 ready for the start of the holiday shopping season. But 0:03:18.040 --> 0:03:22.280 let's focus first on what these signs of resiliency could 0:03:22.280 --> 0:03:24.920 mean for the Fed. Veronica, where do you see the 0:03:24.960 --> 0:03:25.480 FED going? 0:03:25.800 --> 0:03:27.799 Yeah, I mean, I do think can we do see 0:03:27.800 --> 0:03:31.239 the resiliency in consumption and certainly GDP data, But I 0:03:31.240 --> 0:03:33.920 think it's important to keep in mind, you know, the 0:03:33.919 --> 0:03:36.520 SEED does not target GDP. They have a dual mandate, 0:03:36.520 --> 0:03:40.760 which is inflation and the labor market maximum employment. Of course, 0:03:40.760 --> 0:03:43.280 we also got PC inflation data this week and it 0:03:43.400 --> 0:03:46.080 was about as expected in that is a bit stronger 0:03:46.120 --> 0:03:48.600 I think than is comfortable for the FED. But we 0:03:48.600 --> 0:03:50.680 already there were no surprises in that data, and we 0:03:50.720 --> 0:03:54.200 do think that the high level drivers of inflation are slowing. 0:03:54.280 --> 0:03:57.680 You know, we see softer home prices, the labor market 0:03:57.760 --> 0:03:59.960 that has loosened. Wage growth, it I think is slowing. 0:04:00.800 --> 0:04:03.560 So I don't think anything's particularly concerning on the inflation 0:04:03.680 --> 0:04:06.600 front yet. For for FED officials, and then it really 0:04:06.640 --> 0:04:09.080 does come down to the labor market and then the 0:04:09.160 --> 0:04:11.320 data that we're going to get next week, and we 0:04:11.360 --> 0:04:14.080 do think that this is a loosening labor market that 0:04:14.160 --> 0:04:17.120 is on the brink of some outright weakening. You know, 0:04:17.160 --> 0:04:19.080 I think the issue is that, you know, is this 0:04:19.160 --> 0:04:21.880 a normalization in the labor market or is it a weakening? 0:04:21.920 --> 0:04:25.800 Those two are kind of indistinguishable right now, And once 0:04:25.839 --> 0:04:28.440 you do get to that more extreme weakening step, it's 0:04:28.440 --> 0:04:30.680 almost too late for FED policy. So I do think 0:04:30.680 --> 0:04:32.960 they'll want to get ahead of that, and we do 0:04:33.000 --> 0:04:34.880 think that this is a FED that is still cutting 0:04:34.920 --> 0:04:36.960 rates at least to something that looks like three percent. 0:04:37.279 --> 0:04:39.200 Well, what do you think we're going to need to 0:04:39.240 --> 0:04:41.159 see or the FED is going to need to see 0:04:41.200 --> 0:04:44.760 in terms of the labor picture when those jobs numbers 0:04:44.800 --> 0:04:48.120 come out next week, Jen, What will the FED need 0:04:48.200 --> 0:04:51.880 to see in order to get some conviction around the 0:04:51.920 --> 0:04:53.520 idea of a rate cut in December? 0:04:53.720 --> 0:04:55.240 Well, I think they're going to have to start or 0:04:55.320 --> 0:04:58.800 to see ongoing softness in the broader picture of the 0:04:58.839 --> 0:05:01.160 jobs report, but also some of the you know, some 0:05:01.160 --> 0:05:03.680 of those key components. Of course, the job was rate 0:05:04.080 --> 0:05:06.719 which at four point one percent, you know, Fed Shair 0:05:06.760 --> 0:05:09.800 Powell has said that is still historically is still a 0:05:09.800 --> 0:05:11.920 low and a pretty healthy rate overall, and we can't 0:05:11.920 --> 0:05:14.800 disagree with that. So I think it's looking at that, 0:05:15.120 --> 0:05:18.960 looking at you know, the different age components as well, 0:05:19.000 --> 0:05:21.440 for the job you know about about who's losing their 0:05:21.520 --> 0:05:25.040 jobs or where we're seeing job rates increase or decrease, 0:05:25.720 --> 0:05:27.599 and of course just the overall games in the in 0:05:27.640 --> 0:05:29.880 the labor force, in the household survey in particular, because 0:05:29.880 --> 0:05:32.880 we know that the establishment survey, like the headline payroll 0:05:32.920 --> 0:05:36.160 report number is always quite choppy. So I think they're 0:05:36.200 --> 0:05:38.360 just gonna be looking at all the figures almost, which 0:05:38.400 --> 0:05:40.320 sounds like a weak answer, but that's basically what they 0:05:40.320 --> 0:05:42.280 have to do, you know, it's not just focusing on 0:05:42.279 --> 0:05:46.160 one particular component. By the way. For the December rate decision, 0:05:46.320 --> 0:05:49.760 I think it's not as clear as it used to be. We, 0:05:49.960 --> 0:05:52.479 by the way being, we still look for another rate 0:05:52.520 --> 0:05:55.360 cut coming in December, but you know, but we look 0:05:55.400 --> 0:05:57.479 for the FED to sort of hold back and see 0:05:57.480 --> 0:06:00.359 how what the economic landscape looks like, you know, with 0:06:00.400 --> 0:06:02.840 the new administration coming on board, and so we look 0:06:02.920 --> 0:06:06.120 for maybe about four rate cuts to come in twenty 0:06:06.279 --> 0:06:08.560 twenty five, bringing us down to just over three percent. 0:06:08.800 --> 0:06:10.760 Interesting to see if that'll hold up, depending on what 0:06:10.800 --> 0:06:14.520 we get in the policy front from the incoming president. 0:06:14.560 --> 0:06:16.600 But let's get some of your calls on what we 0:06:16.640 --> 0:06:19.360 could get from the job's data next week. Veronica, what 0:06:19.360 --> 0:06:22.480 do you think we're going to see in the November payrolls? 0:06:22.680 --> 0:06:25.680 Right right, So we're penciling in one hundred and fifty 0:06:25.720 --> 0:06:28.640 thousand for right now in the total payroll number. Now 0:06:28.680 --> 0:06:31.440 that payroll number, of course was very weak in October, 0:06:31.560 --> 0:06:34.320 just twelve thousand jobs added, but we do know that 0:06:34.360 --> 0:06:37.480 strikes and hurricanes. Wait on that October number, we should 0:06:37.520 --> 0:06:39.880 get the payback that bounce back from that in November. 0:06:40.440 --> 0:06:42.960 I do think the most important element of next Fridays 0:06:43.080 --> 0:06:45.320 data is going to be the unemployment rate. That data 0:06:45.360 --> 0:06:49.000 should not have been impacted by strikes and hurricanes, and 0:06:49.040 --> 0:06:52.080 we saw it, you know, unchanged on a rounded basis 0:06:52.080 --> 0:06:54.320 in October, but it did increase. You know, it's very 0:06:54.400 --> 0:06:57.640 close surrounding the four point two percent. The only reason 0:06:57.640 --> 0:06:59.919 that it didn't rise actually even more to something like 0:07:00.040 --> 0:07:02.560 four point three percent was we had this big decline 0:07:02.560 --> 0:07:06.840 and labor force participate in October essentially looks to me, like, 0:07:06.920 --> 0:07:08.919 you know, I do think the weakening trend that we 0:07:08.960 --> 0:07:12.800 saw in employment data over the summer is still holding. 0:07:13.360 --> 0:07:16.120 Last week, we actually even got some data on official 0:07:16.160 --> 0:07:19.320 payroll numbers for Q two which were much weaker, you know, 0:07:19.520 --> 0:07:22.800 data that revisions are based on. So this does look 0:07:22.840 --> 0:07:25.080 like a weakening trend of employment, and I think that 0:07:25.120 --> 0:07:28.040 will get more obvious in November data. We are expecting 0:07:28.040 --> 0:07:30.680 the unemployment rate rises back to four point three percent, 0:07:31.240 --> 0:07:33.920 I think, which would be more concerning for FED officials. 0:07:34.120 --> 0:07:36.840 How about your November payrolls, called jen, We're a. 0:07:36.840 --> 0:07:38.800 Little bit higher than that. We've got about one hundred 0:07:39.200 --> 0:07:42.040 one hundred and eighty ish th which is I think 0:07:42.080 --> 0:07:45.360 roughly inline with consensus. And we've got the job is 0:07:45.440 --> 0:07:49.080 rate ticking up to four point two percent, which you 0:07:49.080 --> 0:07:52.640 know is still again overall, still very low. But of 0:07:52.640 --> 0:07:54.800 course it's the trend that counts, right, and we've had 0:07:55.080 --> 0:07:57.160 the jobs rate stuck at four point one percent for 0:07:57.200 --> 0:07:59.680 the last couple of months. I will say that, you know, 0:07:59.720 --> 0:08:01.160 it's just so I always look at the Big Conference 0:08:01.160 --> 0:08:03.280 Sports survey and you know what people are saying, you know, 0:08:03.320 --> 0:08:05.560 our job is plentiful, are their hard to get? And 0:08:05.880 --> 0:08:08.960 it doesn't go hand in hand one hundred percent of 0:08:08.960 --> 0:08:10.600 the time with the job was right, But just the 0:08:10.600 --> 0:08:12.680 fact that it sort of has been improving over the 0:08:12.720 --> 0:08:15.960 last a month or two but it didn't show up 0:08:16.000 --> 0:08:18.040 in the job was raight. So I'm just kind of 0:08:18.080 --> 0:08:20.480 curious to see whether or not we could potentially see 0:08:20.600 --> 0:08:22.040 a drop. Like I said this last time, and I 0:08:22.080 --> 0:08:24.520 was completely wrong, but who knows, we might actually see 0:08:24.520 --> 0:08:27.760 a dip in the jobless rate again. I'm saying that 0:08:27.800 --> 0:08:30.360 only because I'm just looking at what the respondents were saying, 0:08:30.600 --> 0:08:33.960 and it shows that the net labor market differential was 0:08:34.000 --> 0:08:36.959 improving improved again for the second month in a row. 0:08:37.240 --> 0:08:40.080 Jennifer Lee's with us here, senior economist to Demo Capital 0:08:40.080 --> 0:08:43.679 Markets along with Veronica Clark, us economist at City Group. 0:08:44.080 --> 0:08:46.840 Veronica with the resiliency that we're seeing in the US 0:08:46.840 --> 0:08:49.439 economy that we have seen over the last few months, 0:08:50.160 --> 0:08:53.360 is FED policy really restrictive? I mean, the FED says 0:08:53.360 --> 0:08:55.400 it is, but the economy keeps holding up. 0:08:56.040 --> 0:08:58.079 Yeah, I do think it is restrictive, and I think 0:08:58.080 --> 0:09:00.720 we're we're seeing that certainly in the right sense. Of sectors. 0:09:01.120 --> 0:09:03.000 You know, we've seen for for some time now that 0:09:03.120 --> 0:09:06.440 you know, housing activity obviously that's a very rate sensitive sector, 0:09:06.480 --> 0:09:10.080 is very soft. We still see construction, you know, coming 0:09:10.120 --> 0:09:12.920 down WUD would expect that at some point that translates 0:09:12.960 --> 0:09:17.200 to to even weaker construction sector employment. We see manufacturing, 0:09:17.200 --> 0:09:19.400 which is is pretty soft. You know, there's there's pockets 0:09:19.400 --> 0:09:23.000 of resilience, but overall demand and manufacturing seems to be 0:09:23.280 --> 0:09:26.720 modestly contractionary. And I think you're also seeing it just 0:09:26.800 --> 0:09:28.840 in the fact that the labor market has loosened, and 0:09:28.880 --> 0:09:31.880 I think as long as that trend continues, but officials 0:09:31.920 --> 0:09:34.760 will probably conclude that this is still a restrictive level 0:09:34.760 --> 0:09:38.520 of rates. I also would you know, expect and maybe 0:09:38.520 --> 0:09:40.560 be worried that, you know, more of this labor market 0:09:40.559 --> 0:09:44.880 weakening really is coming from the more rate sensitive small businesses. 0:09:44.960 --> 0:09:47.599 It's it's probably less in the large corporates. And you know, 0:09:47.640 --> 0:09:51.840 obviously financial conditions are very easy, but small businesses, you know, 0:09:51.880 --> 0:09:54.480 whose interest expense has gone up, I do think they're 0:09:54.520 --> 0:09:56.440 the ones that are cutting more of their their labor 0:09:56.480 --> 0:09:59.360 costs and that is a sign that that rates are restrictive. 0:10:00.000 --> 0:10:02.840 And since we are heading into the holiday shopping season. 0:10:02.840 --> 0:10:04.720 Here we got Black Friday coming up and all the 0:10:04.800 --> 0:10:07.880 other discounts. Jen want to ask you what kind of 0:10:08.800 --> 0:10:12.880 economic pop we could see from holiday shopping, particularly when 0:10:12.880 --> 0:10:16.040 we hear from so many consumers that you know, the 0:10:16.120 --> 0:10:18.920 lingering effects of inflation have them feeling a little bit cautious. 0:10:18.960 --> 0:10:20.360 Perhaps this year, you. 0:10:20.280 --> 0:10:22.040 Know, I don't know if we're going to see too 0:10:22.080 --> 0:10:24.480 much of a pop in the in the Black Friday sales, 0:10:24.520 --> 0:10:27.000 only because you know, over the past I don't know 0:10:27.040 --> 0:10:29.680 whatever number of years, it seems like we're seeing it 0:10:29.720 --> 0:10:32.520 all spread out, like we're no longer waiting for sales 0:10:32.559 --> 0:10:34.960 to come, you know, the day after Thanksgiving. I remember 0:10:34.960 --> 0:10:38.520 with the first time that you know, one large, very 0:10:38.600 --> 0:10:41.839 large retailer decided to open up their doors on Thanksgiving Day, 0:10:41.840 --> 0:10:43.440 and it was like, what are they doing? What are 0:10:43.440 --> 0:10:45.760 they doing? They're changing things up? And that sort of 0:10:45.760 --> 0:10:47.880 started a trend, and people started opening up their doors 0:10:47.880 --> 0:10:51.160 on Thanksgiving like you know, you know, the morning of 0:10:51.400 --> 0:10:53.480 or even the day before. So the sales have been 0:10:53.520 --> 0:10:56.120 spread out, we're starting to see you know, more of 0:10:56.160 --> 0:10:58.679 a push. So I don't know how much of a 0:10:58.880 --> 0:11:01.319 strong pop we're going to see you know that's specifically 0:11:01.360 --> 0:11:05.400 related to Black Friday sales. But just again going back 0:11:05.440 --> 0:11:07.760 to the US consumer, just the fact that they continue 0:11:07.800 --> 0:11:11.280 to see steady games and wages which will support future spending. 0:11:11.520 --> 0:11:13.199 I think that's the key part as opposed to just 0:11:13.240 --> 0:11:16.360 looking at you know, one particular months of sales. 0:11:16.240 --> 0:11:18.480 And Veronica, I want to ask you, does it get 0:11:18.520 --> 0:11:21.800 more difficult to map out the trajectory for the economy 0:11:21.800 --> 0:11:24.800 when we do have a new administration coming in after 0:11:24.880 --> 0:11:25.800 January twentieth? 0:11:26.160 --> 0:11:29.040 Yeah, it absolutely is. Is pretty difficult. You know, it 0:11:29.120 --> 0:11:31.960 is very hard and very uncertain right now what exactly 0:11:32.000 --> 0:11:34.800 to put in our forecast for next year. Still a 0:11:34.880 --> 0:11:37.000 lot of moving parts and we'll be you know, adapting 0:11:37.000 --> 0:11:39.719 our forecasts as we learn more. You know, I think 0:11:39.720 --> 0:11:42.640 in the immediate term, you know, we were maybe watching for, 0:11:43.040 --> 0:11:45.920 you know, was the election you know, creating any uncertainty 0:11:45.960 --> 0:11:48.839 where people holding back on investment or hiring plans you know, 0:11:48.880 --> 0:11:51.360 before the election, and it did getting past the election 0:11:51.440 --> 0:11:54.360 alleviate some of that uncertainty, So so watching for any 0:11:54.400 --> 0:11:56.480 signs of that and maybe some of the sentiment data. 0:11:57.040 --> 0:12:00.600 And there's been maybe some modestly stronger you know readings 0:12:00.600 --> 0:12:05.640 on your regional manufacturing indicators or survey data for services 0:12:05.679 --> 0:12:08.640 even in November. But it doesn't necessarily look like that 0:12:08.880 --> 0:12:11.640 will be sustained. But I think that's the main, most 0:12:11.640 --> 0:12:14.000 immediate post election dynamic that we're watching. 0:12:14.800 --> 0:12:17.400 Thanks for this really great conversation to get the holiday 0:12:17.480 --> 0:12:18.280 season started. 0:12:18.320 --> 0:12:18.520 Here. 0:12:18.559 --> 0:12:22.360 That's City US economist Veronica Clark and Jennifer Lee, senior 0:12:22.400 --> 0:12:25.679 economist at BEMO Capital Markets. And coming up next, we're 0:12:25.679 --> 0:12:27.440 going to take a closer look at where oil and 0:12:27.480 --> 0:12:30.000 gas prices could be headed with Donald Trump headed back 0:12:30.040 --> 0:12:32.080 to the White House. We're going to speak with Stephen Shork, 0:12:32.320 --> 0:12:35.439 the founder and president of the Shortbrip. As this special 0:12:35.520 --> 0:12:39.880 Thanksgiving edition of Bloomberg Daybreak continues, It's twenty minutes past 0:12:39.920 --> 0:12:54.080 the hour. I'm Nathan Hager, and this is Bloomberg. Thanks 0:12:54.120 --> 0:12:56.320 so much for joining us on this special edition of 0:12:56.360 --> 0:13:00.439 Bloomberg Daybreak. US markets are closed for the Thanksgiving Day holiday. 0:13:00.520 --> 0:13:03.120 I'm Nathan Hager. Well, it's certainly been a volatile year 0:13:03.160 --> 0:13:05.720 in the oil market, with conflict in the Middle East 0:13:05.760 --> 0:13:09.000 and Ukraine. Crude traded near eighty seven dollars a barrel 0:13:09.040 --> 0:13:12.440 back in April, but that price dropped throughout the year, 0:13:12.920 --> 0:13:16.120 and now there's speculation crude prices could fall even further 0:13:16.360 --> 0:13:18.280 under the incoming Trump administration. 0:13:18.840 --> 0:13:21.240 We have so much oil under our feet. We have 0:13:21.360 --> 0:13:23.160 more liquid gold under. 0:13:22.960 --> 0:13:25.559 Our feet than any country in the world, included Saudi 0:13:25.600 --> 0:13:28.920 Arabia and Russia, and we don't use it. 0:13:29.320 --> 0:13:31.800 And that was president like Donald Trump earlier this year 0:13:31.880 --> 0:13:34.640 on the campaign trail for more on the outlook for 0:13:34.760 --> 0:13:37.280 energy markets. In twenty twenty five, we were pleased to 0:13:37.280 --> 0:13:40.959 welcome Stephen Shork, the founder and president of the Short Group. 0:13:41.000 --> 0:13:44.160 Great to have you on with us on this Thanksgiving Day, Stephen. 0:13:44.280 --> 0:13:47.840 And it wasn't just the commentary from the now president 0:13:48.000 --> 0:13:51.520 elect that's fueling speculation here. I mean, we've had some 0:13:51.559 --> 0:13:55.680 pretty bold goals that we're hearing now from incoming Treasury 0:13:55.720 --> 0:13:59.000 Secretary designates Scott Bessen. For one, he's been talking about 0:13:59.240 --> 0:14:02.800 boosting US production by three million barrels a day. I mean, 0:14:02.840 --> 0:14:05.839 how do you see domestic production shifting under this new 0:14:05.840 --> 0:14:06.400 White House. 0:14:07.200 --> 0:14:09.760 Well, I'd certainly hope that that production would follow the 0:14:09.800 --> 0:14:14.240 rules of markets as opposed to political hyperbolate. Clearly, the 0:14:14.320 --> 0:14:18.480 United States is sitting on a significant amount of oil, 0:14:18.920 --> 0:14:21.160 but we're only going to bring that oil out to 0:14:21.280 --> 0:14:24.160 the market if the market is calling for it right now. 0:14:24.520 --> 0:14:27.560 So there is the potential. I'm a little skeptical if 0:14:27.600 --> 0:14:29.640 we can get up by fe million battles in the 0:14:29.680 --> 0:14:33.040 current thirteen point seven million battles for producing today by 0:14:33.160 --> 0:14:37.800 far leading the world in production. So at this point 0:14:38.280 --> 0:14:40.840 there are some grandiose goals. There's a lot of political 0:14:40.880 --> 0:14:44.640 hyperbole out there. I think the thing that investors and 0:14:44.680 --> 0:14:47.320 traders want to take away from this is that we 0:14:47.680 --> 0:14:50.040 clearly have made a one hundred and eighty degree shift 0:14:50.080 --> 0:14:52.800 when it comes to energy policy with this White House. 0:14:53.600 --> 0:14:56.520 The message that the industry had received over the previous 0:14:56.600 --> 0:14:59.640 four years is you're done. It's over. There's no longer 0:14:59.640 --> 0:15:02.200 going to be be a fossil fuel industry if you 0:15:02.280 --> 0:15:05.760 are our corporate treasurer. Very hard to invest in downstream 0:15:05.840 --> 0:15:09.040 capacity when you're getting this type of rhetoric as opposed 0:15:09.040 --> 0:15:11.560 to what we're seeing now. So I think what we're 0:15:11.560 --> 0:15:14.200 looking at now is more confidence on the industry to 0:15:14.480 --> 0:15:18.520 invest and to build out. But certainly, the oil industry, 0:15:18.600 --> 0:15:22.760 as any industry, is not a tool of any political party, 0:15:23.000 --> 0:15:26.440 and it will respond accordingly as the market dictates. 0:15:26.720 --> 0:15:30.160 Well, given current market conditions, what do you see as 0:15:30.200 --> 0:15:33.840 a more realistic production output goal. 0:15:34.320 --> 0:15:37.360 I think what we'll see right now is that a 0:15:37.360 --> 0:15:41.080 lot of talk of increased sanctions on Russia, sanctions that 0:15:41.120 --> 0:15:44.720 are actually been forced on Iran, is I Ran in 0:15:44.720 --> 0:15:49.120 both Russia, the current sanctions on them are flouted in 0:15:49.200 --> 0:15:53.920 the open. So there will be some production from these 0:15:53.920 --> 0:15:57.160 two entities that will be I mean, not eliminated, but 0:15:57.720 --> 0:15:59.760 it will be difficult to get the oil to the market. 0:16:00.080 --> 0:16:03.920 Thirteen point seven, which is where all time highs right 0:16:03.960 --> 0:16:07.920 now given current market conditions, where this has been a 0:16:08.000 --> 0:16:13.560 demand driven markets, regardless of the potential supply disruptions from 0:16:13.640 --> 0:16:17.480 wars in Ukraine, wars in the Mole East, that has 0:16:17.520 --> 0:16:21.320 been overshadowed by a lack of demand. So even though 0:16:21.440 --> 0:16:25.160 supply is thought to be under constrain, demand isn't there 0:16:25.160 --> 0:16:28.600 to put any sort of upward pressure. So production at 0:16:28.720 --> 0:16:32.160 current levels I think is a realistic target going into 0:16:32.240 --> 0:16:33.760 and three twenty twenty five. 0:16:34.040 --> 0:16:38.600 What do you see in terms of investment into further 0:16:38.880 --> 0:16:43.560 domestic production? Can companies the way things are structured now 0:16:44.200 --> 0:16:46.840 meet the kind of goals that at least at this 0:16:47.040 --> 0:16:49.600 point we're hearing from the incoming administration. 0:16:50.600 --> 0:16:53.600 Well, it's going to depend on how we lift any 0:16:53.600 --> 0:16:57.400 sort of moratoriums or whether they're codified or it's sent 0:16:57.480 --> 0:17:01.600 through different back channels about investing. Clearly that was the 0:17:01.640 --> 0:17:04.080 message that has been received over the past four years. 0:17:04.520 --> 0:17:08.400 So those back channels are being lifted. We had a 0:17:08.400 --> 0:17:12.359 activist judge that put a moratorium on for the US 0:17:12.520 --> 0:17:18.400 LNG expansion. The current administration put a moratorium on permitting 0:17:18.680 --> 0:17:22.920 for new LNG expansion. That will disappear a minute one 0:17:23.040 --> 0:17:26.919 on January twentieth. It certainly will free up the market 0:17:26.920 --> 0:17:30.080 to respond, and there's a tremendous amount of response, both 0:17:30.080 --> 0:17:33.600 on the oil side and mostly on the natural gas side, 0:17:33.680 --> 0:17:37.399 and really helping the industry to mature to a level 0:17:37.400 --> 0:17:40.880 where it should have been five years ago. It has 0:17:40.960 --> 0:17:43.360 been retarded up until this point. What we've seen here 0:17:43.359 --> 0:17:45.680 in my home state of Pennsylvania. We're going to restart 0:17:45.800 --> 0:17:49.320 thee Mayle Island. We're restarting a nuclear station in southwestern 0:17:49.600 --> 0:17:53.480 Michigan to meet the growing power demand being driven by 0:17:53.560 --> 0:17:55.560 AI and data centers. 0:17:55.800 --> 0:17:58.800 We're speaking with STEVENS. Short, the founder and president of 0:17:59.000 --> 0:18:03.800 the Short Group energy analysis firm. You mentioned the sanctions 0:18:03.840 --> 0:18:06.520 that are still in place on Iranian oil, how that 0:18:06.560 --> 0:18:08.919 could shift. I wonder your view as well on some 0:18:08.960 --> 0:18:11.639 of the other sanctions regimes and how they could change 0:18:11.720 --> 0:18:16.240 under the next administration, particularly when it comes to Venezuela 0:18:16.280 --> 0:18:19.359 and some other countries that are seeing some constraints in 0:18:19.640 --> 0:18:24.200 their oil exportabilities given what the current policy is under 0:18:24.200 --> 0:18:25.119 the Biden administration. 0:18:25.480 --> 0:18:28.440 I in Venezuela is very interesting because of course we're 0:18:28.440 --> 0:18:31.720 talking about a country that's sitting on the largest reserves 0:18:31.760 --> 0:18:34.840 of oil in the world. The problem with Venezuelan oil 0:18:34.920 --> 0:18:37.399 it is the dirtiest oil in the world. It is 0:18:37.600 --> 0:18:41.200 literally sludge that you have to seed up to reduce 0:18:41.240 --> 0:18:44.080 the discosity so you can actually get distinct to flow 0:18:44.160 --> 0:18:47.879 through a pipeline. Now, Venezuela was a pariah prior to 0:18:47.880 --> 0:18:51.240 four years ago with the Banduro, and let's be blunt 0:18:51.240 --> 0:18:56.040 about this dictatorship. You really don't have to sanction Venezuela. 0:18:56.160 --> 0:18:59.320 Socialism is doing all of the sanctioning that that US 0:18:59.320 --> 0:19:02.160 could ever do. So there are a lack of investment, 0:19:02.480 --> 0:19:06.600 the deterioration in their infrastructure makes it very difficult for 0:19:06.720 --> 0:19:10.480 Venezuela to get oil onto the market. Venezuela is such 0:19:10.480 --> 0:19:13.879 a minor player on the global scale, any sort of 0:19:13.880 --> 0:19:19.280 sanctions there will easily absorbed is already easily absorbed by 0:19:19.359 --> 0:19:20.560 US production alone. 0:19:20.680 --> 0:19:24.480 You also mentioned the potential boost to nuclear power that 0:19:24.760 --> 0:19:28.760 could be coming, particularly with the needs of AI data centers, 0:19:28.800 --> 0:19:32.040 and I wondered your view as well on how the 0:19:32.160 --> 0:19:35.960 energy transition to more clean energy could be affected now 0:19:35.960 --> 0:19:39.000 that we have an incoming administration that's seen as more 0:19:39.040 --> 0:19:43.040 friendly to fossil fuels but also has a big advisor 0:19:43.520 --> 0:19:46.000 in Tesla CEO Elon Musk. 0:19:46.240 --> 0:19:51.119 The push towards the green economy will be retarded, but 0:19:51.440 --> 0:19:54.080 it is a good thing because now we're seeking a 0:19:54.119 --> 0:20:00.200 more balanced energy portfolio. We've insisted on going down a 0:20:00.280 --> 0:20:04.080 root of the binary routes that we are going to 0:20:04.119 --> 0:20:07.440 eliminate every fossil fuel and everything we're going to burn 0:20:07.640 --> 0:20:11.040 is going to be clean. That is an admirable goal, 0:20:11.480 --> 0:20:14.840 as it is an impossible goal, but it is part 0:20:14.960 --> 0:20:17.440 of the mix. And what we've learned over the past 0:20:17.520 --> 0:20:22.359 two years that the transition. We've codified the amount of 0:20:22.480 --> 0:20:25.040 natural gas and coal that has to be taken out 0:20:25.040 --> 0:20:29.080 of the power stack, the stack that generates electricity, but 0:20:29.200 --> 0:20:34.280 the entities that be the interconnections, the regional transmission organizations, 0:20:34.359 --> 0:20:40.280 people like art PGM, which are tasked with aggregating power 0:20:40.640 --> 0:20:44.679 and generating and distributing that power. They've been telling the 0:20:44.760 --> 0:20:48.439 government for the past two years that it cannot happen. 0:20:48.600 --> 0:20:51.120 We are taking too much natural gas, too much coal 0:20:51.359 --> 0:20:55.320 quote unquote dispatchable BTUs. This is the generation that you 0:20:55.359 --> 0:20:58.800 can turn on a dime and create more electricity. We're 0:20:58.840 --> 0:21:01.120 taking too much of that out of the market too 0:21:01.200 --> 0:21:05.680 fast because we can't replace it with all the green initiatives. 0:21:06.240 --> 0:21:09.639 So at this point we'll see a transition back to 0:21:10.240 --> 0:21:14.359 a friendlier environment. I think for an entire portfolio, portfolio 0:21:14.359 --> 0:21:17.800 that isn't inclusive, and people listening to this, I encourage 0:21:17.840 --> 0:21:22.080 you to go back to the DNC platform. In twenty twelve, 0:21:22.160 --> 0:21:25.440 when President Obama was running for his reelection and he 0:21:25.560 --> 0:21:28.680 had the policy that is now going to be embraced 0:21:28.720 --> 0:21:33.320 by the second Trump administration, his policy was pushing green forward, 0:21:33.480 --> 0:21:38.600 renewables forward, yes, but also taking advantage of the tremendous 0:21:38.640 --> 0:21:42.040 amount of natural resources that this country has a comparative 0:21:42.080 --> 0:21:45.520 advantage for Obama was for that, and with the second 0:21:45.560 --> 0:21:49.680 Trump administration, we're going back more towards that Obama energy policy. 0:21:50.160 --> 0:21:52.120 Stephen, do you think we're still going to see an 0:21:52.160 --> 0:21:56.119 impact on geopolitical risk on the crude market with the 0:21:56.119 --> 0:21:59.600 next administration? And what's your price target for crude heading 0:21:59.640 --> 0:22:00.119 into two. 0:22:01.280 --> 0:22:04.320 We've seen so many headlines over the past two years, 0:22:04.320 --> 0:22:07.840 first of course with Russia's invasion of Ukraine and then 0:22:07.880 --> 0:22:11.560 the atrocities on October seventh, and then the ongoing war 0:22:11.680 --> 0:22:13.280 in the Middle East and what that has done through 0:22:13.400 --> 0:22:16.680 disruption to the flow of oil on tankers coming out 0:22:16.720 --> 0:22:19.080 of the Middle East had to be diverted, but it 0:22:19.160 --> 0:22:22.360 has not had any impact. So with the new administration, 0:22:22.520 --> 0:22:25.879 I'm not a political scientist, but I certainly know some 0:22:26.080 --> 0:22:30.280 reputable mainstream media reported because there's actually a discussion in 0:22:30.320 --> 0:22:35.600 this administration of supplying Ukraine now with nuclear weapons. That's insane. 0:22:36.160 --> 0:22:38.879 So I think we can step back perhaps on the 0:22:39.000 --> 0:22:43.320 rhetoric there and hopefully get some sort of resolution going on. 0:22:43.520 --> 0:22:46.280 Is the tragedy that is now partaking in the Middle East, 0:22:46.560 --> 0:22:49.800 Let's see on that. But I do not have certainly 0:22:49.840 --> 0:22:52.119 crystal ball. But what we do have, Nathan, is we 0:22:52.160 --> 0:22:55.800 have mathematics and we have probabilities and we can calculate 0:22:55.920 --> 0:22:59.560 volatility and we can come up with market direction to 0:22:59.680 --> 0:23:02.159 drift of the market. So to go back to your 0:23:02.240 --> 0:23:05.959 question about pricing, Well, we came into this quarter and 0:23:06.000 --> 0:23:08.800 I have advice clients with our fall forecast. This is 0:23:08.840 --> 0:23:12.719 all based on our probabilistic modeling that we began this 0:23:12.880 --> 0:23:16.119 quarter in WTI at just under seventy two dollars a 0:23:16.160 --> 0:23:19.159 barrow on the Brent crude all market. We opened up 0:23:19.160 --> 0:23:23.200 the market right around seventy two dollars and we had 0:23:23.200 --> 0:23:27.480 a fifty percent probability that between the end of September 0:23:27.520 --> 0:23:29.960 and the end of this year that the market would 0:23:29.960 --> 0:23:32.800 hold in between seventy three dollars and fifty nine cents 0:23:32.840 --> 0:23:35.560 in WTI, and that would be seventy eight thousand and 0:23:35.600 --> 0:23:39.119 sixty six cents in Brent, with a median output in 0:23:39.280 --> 0:23:43.640 WTI sixty four sixty two and in Brent seventy twenty five. 0:23:43.880 --> 0:23:47.119 And that's exactly Nathan, where we've been. We've yo yoed. 0:23:47.119 --> 0:23:49.560 We had some strength in the first week of October. 0:23:49.840 --> 0:23:52.280 WTI got up to over seventy seven dollars a barrow, 0:23:52.560 --> 0:23:55.200 Brent Crudell got up to almost eighty one dollars a barrew, 0:23:55.520 --> 0:23:58.640 but we both markets quickly. You trace back below our 0:23:58.680 --> 0:24:01.840 fifty percent line, and we've been yo yoing in between 0:24:01.840 --> 0:24:04.639 that line. Our numbers were between and I'm just going 0:24:04.680 --> 0:24:07.840 to round it now, say seventy three fifty and sixty 0:24:07.880 --> 0:24:11.600 four to fifty. The earlier this week WTI traded just 0:24:11.640 --> 0:24:14.680 around seventy one dollars a barrel, so we're right there. 0:24:14.800 --> 0:24:17.840 The same goes with Brent between i'll call it seventy 0:24:17.920 --> 0:24:21.240 nine dollars and seventy dollars, and earlier this week we 0:24:21.359 --> 0:24:23.840 traded just over seventy five dollars, so we're halfway in 0:24:23.920 --> 0:24:27.520 between that. In between these ranges, regardless of all the headlines, 0:24:27.880 --> 0:24:31.639 the politics, the election, everything that has gone into this 0:24:32.040 --> 0:24:35.280 oil has been a very stable market. And your takeaway 0:24:35.320 --> 0:24:39.000 here is that, regardless of all of the headlines we've 0:24:39.000 --> 0:24:42.400 seen with regard to supply risk, it's all about demand, 0:24:42.720 --> 0:24:46.399 and the demand simply isn't there. So going into twenty 0:24:46.440 --> 0:24:49.000 twenty five, I suspect we're going to I'll have to 0:24:49.040 --> 0:24:51.760 run the numbers at the end of December, but I 0:24:51.800 --> 0:24:55.520 think a oil bound in between eighty dollars and sixty 0:24:55.560 --> 0:24:58.480 five dollars. I know it's a wide range, but those 0:24:58.520 --> 0:25:01.080 are your extreme prices at the point. But certainly I 0:25:01.119 --> 0:25:04.119 think oil currently where it's been trading at seventy seventy 0:25:04.160 --> 0:25:07.000 five dollars range, that is the sweet spot for oil 0:25:07.080 --> 0:25:08.480 going into twenty twenty five. 0:25:08.760 --> 0:25:11.320 Really appreciate this. Stephen, thanks again for being with us. 0:25:11.359 --> 0:25:14.800 That's Stephen Shork, founder and president of the Short Group. 0:25:14.920 --> 0:25:18.240 And coming up next, what will happen to antitrust litigation 0:25:18.320 --> 0:25:21.680 against big tech once the new administration takes over? We'll 0:25:21.720 --> 0:25:25.520 speak with Jenniferree, senior litigation analysts for Anti trust with 0:25:25.600 --> 0:25:29.320 Bloomberg Intelligence. That's as this special Thanksgiving edition of Bloomberg 0:25:29.400 --> 0:25:44.080 Daybreak continues. I'm Nathan Hager, and this is Bloomberg. Thanks 0:25:44.080 --> 0:25:46.359 again for being with us on this special edition of 0:25:46.400 --> 0:25:50.400 Bloomberg Daybreak. US markets are closed for the Thanksgiving Day holiday. 0:25:50.680 --> 0:25:53.680 I'm Nathan Hager. Big tech has certainly been in the 0:25:53.720 --> 0:25:57.720 crosshairs of US anti trust agencies under the Biden administration. 0:25:58.240 --> 0:26:00.800 So what's going to happen to the slew of cases 0:26:00.840 --> 0:26:03.640 that the industry is facing once Donald Trump takes over 0:26:03.680 --> 0:26:07.159 the White House in January? For answers, we are pleased 0:26:07.160 --> 0:26:12.480 to welcome Jenniferree, senior litigation analysts for antitrust at Bloomberg Intelligence. 0:26:12.520 --> 0:26:14.760 Great to have you with us, Jen of course, I 0:26:14.800 --> 0:26:18.240 know you've been following these cases very closely, literally for years. 0:26:18.320 --> 0:26:21.880 So what does happen under a new Trump administration? 0:26:22.280 --> 0:26:25.720 Well, thanks for having me, Nathan, and happy Thanksgiving. I 0:26:25.760 --> 0:26:29.000 would say not very much in the near term. Maybe 0:26:29.000 --> 0:26:31.280 way down the road. For a few of these cases, 0:26:31.600 --> 0:26:34.760 there could be an easier process to get to a settlement, 0:26:35.240 --> 0:26:38.480 but I think that depends on what happens in the litigation. 0:26:38.680 --> 0:26:41.160 So let me start with what's going on right now. 0:26:41.480 --> 0:26:45.639 We have Department of Justice lawsuits for monopolization against Google 0:26:45.720 --> 0:26:48.080 in the search area and against Google in the ad 0:26:48.080 --> 0:26:51.680 tech space. We also have Department of Justice lawsuits against 0:26:51.760 --> 0:26:54.720 Apple and one against Live Nation, and then Federal Trade 0:26:54.720 --> 0:26:57.760 Commission suits against Meta and Amazon. Now I should say 0:26:57.760 --> 0:27:00.760 that these aren't the only monopolization lawsuits the agencies have 0:27:00.840 --> 0:27:03.240 ongoing now, but these are the ones that are focused 0:27:03.240 --> 0:27:05.520 on big tech. And I think you know big tech 0:27:05.600 --> 0:27:09.440 is an issue because we do know that President elect 0:27:09.480 --> 0:27:12.520 Donald Trump's vice president Jade Vance is no big fan 0:27:12.800 --> 0:27:15.760 of any of these companies. He's actually been aligned with 0:27:15.840 --> 0:27:18.119 the position that has been taken by the DOJ and 0:27:18.280 --> 0:27:21.240 by the FTC to really aggressively go after them. So 0:27:21.280 --> 0:27:25.080 at least he has Donald Trump's ear and we'll have 0:27:25.160 --> 0:27:28.640 some influence on the trajectory of what happens here. So 0:27:29.200 --> 0:27:31.720 the cases that are very far along, for instance, the 0:27:31.760 --> 0:27:34.399 two Department of Justice lawsuits against Google, both in the 0:27:34.440 --> 0:27:36.920 ad tech space and the search space, are very far 0:27:36.960 --> 0:27:40.440 along in the litigation process. We have a liability decision 0:27:40.480 --> 0:27:43.440 against Google in search. So in the Department of Justice 0:27:43.520 --> 0:27:46.320 versus Google ad Tech case, they've recently had their closing 0:27:46.480 --> 0:27:49.399 arguments and we do expect a decision sometime before the 0:27:49.520 --> 0:27:51.920 end of this year, and we also believe it will 0:27:51.920 --> 0:27:54.880 be a liability decision against Google, so that'll move into 0:27:54.880 --> 0:27:57.880 the remedies phase, just as the Google Department of Justice 0:27:57.960 --> 0:28:00.520 versus Google Search case has moved into the remedy phase. 0:28:01.119 --> 0:28:04.040 And the only thing I see happening there that could 0:28:04.160 --> 0:28:08.280 be different given Trump's enforcers will be taking charge next 0:28:08.320 --> 0:28:11.520 year versus Biden's enforcers, is that if the judge in 0:28:11.600 --> 0:28:15.200 the Search case does agree with the Department of Justice 0:28:15.240 --> 0:28:18.440 and orders a remedy, which is a breakup of the company, 0:28:18.480 --> 0:28:21.680 in other words, forces Google to sell Chrome. I could 0:28:21.720 --> 0:28:24.440 see some sort of settlement that pulls back on that, 0:28:24.520 --> 0:28:27.400 because we do know that President elect Trump has mentioned 0:28:27.680 --> 0:28:29.800 that he thinks Schoogle needs to be punished, but he 0:28:29.840 --> 0:28:32.200 doesn't necessarily think of breakup is the way to go. 0:28:32.480 --> 0:28:35.080 He talked about that in an interview with Bloomberg's John 0:28:35.119 --> 0:28:38.600 Mickelthwaite just a few weeks ago. So that's one thing 0:28:38.600 --> 0:28:40.920 that could happen. I should say, I don't expect the 0:28:41.000 --> 0:28:43.440 judge to order that. We know the Department of Justice 0:28:43.440 --> 0:28:45.600 has asked for that remedy. I think this is a 0:28:45.640 --> 0:28:48.560 cautious judge. I think he's going to it will be 0:28:48.640 --> 0:28:50.600 a tough remedy, but I don't think it's going to 0:28:50.640 --> 0:28:53.240 be structural. In other words, I don't think he'll order 0:28:53.280 --> 0:28:55.840 the company to have to sell off any piece of itself, 0:28:55.880 --> 0:28:57.360 whether it's Chrome or Android. 0:28:57.560 --> 0:28:59.440 Okay, So a lot of these cases that the Biden 0:28:59.440 --> 0:29:02.240 administrations should have put in place a pretty late in 0:29:02.440 --> 0:29:05.640 the argument and decision phase. But when it comes to 0:29:05.960 --> 0:29:10.320 how the focus could potentially change under a Trump administration 0:29:10.400 --> 0:29:13.160 when it comes to big tech, do you expect any 0:29:13.280 --> 0:29:15.760 changes in terms of whether they could be focusing more 0:29:16.080 --> 0:29:19.200 on the competition piece or the content piece for some 0:29:19.240 --> 0:29:20.000 of these companies. 0:29:20.320 --> 0:29:23.120 You know, it's a really good question because there's bipartisan 0:29:23.840 --> 0:29:26.520 anger at big tech at the moment, but it comes 0:29:26.560 --> 0:29:29.560 from two different places, with most of the Democrats being 0:29:29.600 --> 0:29:33.600 concerned about monopolistic conduct and being gatekeepers, whereas on the 0:29:33.640 --> 0:29:36.280 Republican side, most of the concern is about the content 0:29:36.720 --> 0:29:39.880 and the feeling that there's some censorship of conservative viewpoints. 0:29:40.240 --> 0:29:42.920 But the thing is, the antitrust laws can be used 0:29:42.920 --> 0:29:45.600 as a punishment even if they shouldn't be. They can 0:29:45.680 --> 0:29:48.040 be used as a punishment, even if the concern is 0:29:48.080 --> 0:29:51.960 on the content side. Now, the Federal Communications Commission, the 0:29:51.960 --> 0:29:53.800 Department of Justice, there are other things that can be 0:29:53.840 --> 0:29:57.200 done on the content side, But these lawsuits could be 0:29:57.240 --> 0:30:01.920 continued because of the anger about the perceived censorship, even 0:30:01.960 --> 0:30:05.000 if that's not really a competition violation. 0:30:05.920 --> 0:30:08.160 Now, more broadly, there's a lot of talk on Wall 0:30:08.160 --> 0:30:11.720 Street as well that once this new administration comes in, 0:30:11.800 --> 0:30:15.280 the M and A environment, the deal making environment is 0:30:15.320 --> 0:30:18.080 going to shift dramatically. How do you see it. 0:30:18.400 --> 0:30:21.080 I do think it'll shift. I don't think it'll shift dramatically. 0:30:22.000 --> 0:30:25.440 The big difference between this FTC and Department of Justice 0:30:25.560 --> 0:30:29.960 from forty years before is the unwillingness to settle problematic deals. 0:30:29.960 --> 0:30:31.640 I mean, it used to be if a deal raised 0:30:31.640 --> 0:30:35.000 anti trust concerns, those concerns would get resolved by a 0:30:35.080 --> 0:30:37.000 sale of a piece of the assets of one of 0:30:37.000 --> 0:30:40.520 the companies or by promises behavioral promises to conduct the 0:30:40.560 --> 0:30:43.600 business in a certain way post merger. But this particular 0:30:43.680 --> 0:30:46.720 Biden's FTC and DJ said no, that didn't work. We 0:30:46.800 --> 0:30:48.960 don't think any of these remedies have worked. We think 0:30:49.000 --> 0:30:51.920 it's led to industries and the economy that's just too 0:30:51.960 --> 0:30:55.240 consolidated and has caused a lot of problems. So we're 0:30:55.280 --> 0:30:57.800 just going to challenge deals that are problematic rather than 0:30:57.840 --> 0:30:59.840 settling them. I think what we're going to see as 0:30:59.880 --> 0:31:03.400 a step back toward more agreements to settle cases, so 0:31:03.560 --> 0:31:06.440 fewer challenges in court, and more deals that ultimately are 0:31:06.480 --> 0:31:08.680 able to close because they're able to get to a 0:31:08.680 --> 0:31:11.600 settlement with the agencies. I think we'll move in that direction, 0:31:11.920 --> 0:31:14.000 but I don't necessarily think it's going to be this 0:31:14.120 --> 0:31:17.800 complete and total retrenchment where all of these deals easily 0:31:17.880 --> 0:31:21.440 skate by anti trust enforcement in the merger area started 0:31:21.480 --> 0:31:24.479 to pick up the first time Trump was president, and 0:31:24.560 --> 0:31:27.320 under his Department of Justice and his Federal Trade Commission, 0:31:27.320 --> 0:31:30.080 we saw an uptick. So I don't necessarily think we're 0:31:30.080 --> 0:31:31.520 going to go back to the way things were ten 0:31:31.600 --> 0:31:32.520 or fifteen years ago. 0:31:33.040 --> 0:31:37.520 We're speaking with Jenniferree, she's a senior analyst for antitrust 0:31:37.600 --> 0:31:41.560 litigation for Bloomberg Intelligence. A lot of question about what 0:31:41.600 --> 0:31:43.760 the Federal Trade Commission is going to even look like 0:31:44.080 --> 0:31:48.760 under the next administration. What happens once Lena Khan is 0:31:48.840 --> 0:31:49.680 off the scene. 0:31:50.160 --> 0:31:52.480 Well, I think that there will be a tough period 0:31:52.520 --> 0:31:54.760 for just a short time for the FTC because I 0:31:54.800 --> 0:31:57.760 suspect Lena Khan will leave on her own in January. 0:31:57.800 --> 0:32:00.800 That's the convention, it's what's normally done. I think she'll 0:32:00.840 --> 0:32:03.440 probably do that, And what that means it will leave 0:32:03.480 --> 0:32:07.160 two Democrats and two Republicans until Donald Trump can put 0:32:07.360 --> 0:32:10.000 a new chair in place. Now, he'll appoint one of 0:32:10.040 --> 0:32:12.960 the Republicans as the acting chair right away, but you're 0:32:13.000 --> 0:32:15.080 still going to be left with a two to two commission, 0:32:15.120 --> 0:32:17.920 which means if they have a tied vote on an 0:32:18.000 --> 0:32:21.479 enforcement action or pulling back on an FTC policy. They 0:32:21.520 --> 0:32:23.520 won't be able to do it because it requires a 0:32:23.560 --> 0:32:26.440 majority vote to do anything, So for a few months 0:32:26.440 --> 0:32:29.880 they may be a bit stuck. I do think Donald 0:32:29.920 --> 0:32:32.360 Trump will be able to push through people a little 0:32:32.400 --> 0:32:35.320 faster than usual because he does have a Republican Senate 0:32:35.360 --> 0:32:37.920 in a Republican House. So it just depends on what 0:32:38.000 --> 0:32:40.440 his priorities are and getting his people in place and 0:32:40.480 --> 0:32:42.560 how fast he can do that. But it could be 0:32:42.680 --> 0:32:45.240 up to six months where they're stuck in that two 0:32:45.320 --> 0:32:46.840 to two situation at the FTC. 0:32:47.360 --> 0:32:50.240 And what about anti trust leadership at the Justice Department. 0:32:50.280 --> 0:32:53.040 I mean, we have a new Attorney General designate in 0:32:53.280 --> 0:32:56.080 Pam BONDI what are your thoughts on her when it 0:32:56.120 --> 0:32:57.760 comes to anti trust enforcement? 0:32:59.040 --> 0:33:01.320 You know, I think that she she seems to be 0:33:01.840 --> 0:33:05.320 very conservative obviously and kind of a typical Republican in 0:33:05.720 --> 0:33:08.560 that respect. I think, really at the end of the day, 0:33:08.680 --> 0:33:11.000 it's going to be more about who is named as 0:33:11.040 --> 0:33:13.960 the Assistant Attorney General in charge of anti trust. That's 0:33:14.080 --> 0:33:17.080 really the main decision maker on the anti trust side, 0:33:17.440 --> 0:33:19.680 and we don't know who that will be yet. But 0:33:19.840 --> 0:33:22.240 the changeover at the DOJ will occur a little bit 0:33:22.280 --> 0:33:26.880 faster because the political appointees, the Attorney General, the assistant 0:33:26.880 --> 0:33:29.800 Attorney generals, they will step down in January and then 0:33:29.840 --> 0:33:32.560 somebody else, likely a Republican, will be named as the 0:33:32.600 --> 0:33:35.640 acting Assistant Attorney General in charge of anti trust and 0:33:35.680 --> 0:33:38.840 will start making the decisions. So we'll see some changeover 0:33:38.920 --> 0:33:41.520 I think in anti trust there more quickly than we 0:33:41.560 --> 0:33:43.480 will at the FTC. And I'm thinking in terms of 0:33:43.520 --> 0:33:46.520 merger enforcement and those deals that are pending and where 0:33:46.560 --> 0:33:47.800 decisions need to be made. 0:33:47.880 --> 0:33:51.320 And are you expecting any major changes in antitrust legislation, 0:33:51.400 --> 0:33:56.960 any movement on that under a Republican controlled Congress, you know, 0:33:57.040 --> 0:33:57.440 I think. 0:33:57.320 --> 0:33:59.920 That there's some difficulty. They have had difficulty in the 0:34:00.120 --> 0:34:02.440 pass with most of the anti trust bills that have 0:34:02.560 --> 0:34:07.920 been introduced, because even within political parties, there's dissension about 0:34:07.960 --> 0:34:11.080 exactly what those bills should say and what they should do, 0:34:11.160 --> 0:34:13.839 and the devil's really in the details. But one thing 0:34:13.840 --> 0:34:15.759 I've seen talked about quite a bit that I do 0:34:15.800 --> 0:34:19.279 think maybe has a shot is this concept that's been 0:34:19.320 --> 0:34:22.680 floating around for many years with a core group of Republicans, 0:34:22.920 --> 0:34:25.319 which is to take the anti trust enforcement from the 0:34:25.360 --> 0:34:29.279 FTC and put it all into the DOJ's hands. This 0:34:29.320 --> 0:34:32.800 has never really gone very far, but it's possible something 0:34:32.880 --> 0:34:35.160 like that could gain some traction. The FTC, of course, 0:34:35.160 --> 0:34:37.719 would still have the consumer protection work, which is a 0:34:37.719 --> 0:34:40.479 big part of what that agency does, So I'm sort 0:34:40.480 --> 0:34:42.799 of watching for that to see if something like that 0:34:42.840 --> 0:34:44.600 gets pushed forward in the new Congress. 0:34:44.920 --> 0:34:48.680 Of course, one of the biggest advisors for President elect Trump, 0:34:49.040 --> 0:34:51.200 not just when it comes to tech but for all 0:34:51.239 --> 0:34:54.279 sorts of issues is Elon Musk. Do you see an 0:34:54.280 --> 0:34:56.759 Elon Musk factor at play when it comes to big 0:34:56.760 --> 0:34:57.440 tech regulation? 0:34:57.800 --> 0:35:02.640 Well, I think possibly yes, going easier on techs, particularly 0:35:02.680 --> 0:35:07.320 in new and innovative areas, for instance, enforcement of AI, 0:35:07.560 --> 0:35:10.759 the activity in AI this particular, FTC and DJ are 0:35:10.800 --> 0:35:14.640 really watching what happens there because in this next wave 0:35:14.719 --> 0:35:18.399 of technology, they don't want once again really big gatekeepers 0:35:18.440 --> 0:35:22.880 controlling it. They want any AI technology to be open, 0:35:23.440 --> 0:35:26.640 and so they've been really cracking down investigating investments in 0:35:26.680 --> 0:35:29.680 AI by the big tech companies, looking at AI and 0:35:29.719 --> 0:35:32.160 how it operates, and I think probably with the Elon 0:35:32.280 --> 0:35:34.719 Musk factor, there might be some pullback on that just 0:35:34.719 --> 0:35:37.920 to open things up and allow for innovation and in the. 0:35:37.920 --> 0:35:39.799 Time we have left, they'd be curious to get your 0:35:39.800 --> 0:35:42.680 take as well on some of the other pending cases 0:35:43.400 --> 0:35:47.680 outside of tech. We've got a capital one discovered deal 0:35:48.200 --> 0:35:50.800 for one. Where do you see that going? 0:35:51.320 --> 0:35:53.560 I think that's one deal that really could benefit from 0:35:53.560 --> 0:35:56.080 the Trump administration. I think he's said a lot of 0:35:56.120 --> 0:35:59.040 things about wanting to go easier on the financial markets. 0:35:59.760 --> 0:36:02.800 That respect, I do think that deal has a better 0:36:02.880 --> 0:36:06.040 shot at getting through. I had some concerns about if 0:36:06.120 --> 0:36:08.719 the decision needed to be made this year. I had 0:36:08.760 --> 0:36:12.680 some concerns about Biden's DOJ suing to block it. Concerned 0:36:12.719 --> 0:36:17.880 about credit card lending to subprime borrowers. It's a very 0:36:17.960 --> 0:36:20.520 narrow market, but it is kind of a market that 0:36:20.640 --> 0:36:24.279 this administration has focused on. And I do think under 0:36:24.320 --> 0:36:28.000 the Trump administration, because I believe that administration wants to 0:36:28.040 --> 0:36:30.279 go easier on the financial markets, that deal has a 0:36:30.320 --> 0:36:30.840 better shot. 0:36:31.080 --> 0:36:35.120 And just generally, Jen, do you see the Republican Party 0:36:35.280 --> 0:36:39.360 under President Elect Trump as business friendly as the gop 0:36:39.520 --> 0:36:40.200 of Old. 0:36:40.800 --> 0:36:42.640 No, I don't think so. I mean, this is not 0:36:42.719 --> 0:36:45.560 the gop of Old and anything. We all know that 0:36:45.680 --> 0:36:48.000 because we have an example of what happened the first 0:36:48.040 --> 0:36:51.239 time Donald Trump was the president, and to me, you 0:36:51.280 --> 0:36:53.600 know a lot there's a lot of unknown coming up, 0:36:53.640 --> 0:36:56.799 and this is an erratic president. We've seen that. But 0:36:56.960 --> 0:36:58.600 I think the best you can do is say the 0:36:58.640 --> 0:37:01.000 past is the best predictor of future. So I look 0:37:01.080 --> 0:37:04.200 back at those four years, and it wasn't a particularly 0:37:04.480 --> 0:37:05.960 business friendly four years. 0:37:06.200 --> 0:37:06.400 You know. 0:37:06.480 --> 0:37:09.719 It was the Trump's DOJ that started investigations of all 0:37:09.760 --> 0:37:13.120 of those big tech platforms and started two lawsuits, one 0:37:13.160 --> 0:37:15.799 against Meta and one against Google. All of those then 0:37:15.840 --> 0:37:20.239 flourished under Biden's enforcers and turned into lawsuits. It was 0:37:20.320 --> 0:37:22.920 the Trump's Department of Justice and FTC that began to 0:37:22.960 --> 0:37:26.560 look at vertical deals, which Republicans of old always thought 0:37:26.560 --> 0:37:29.360 were fine, that they were pro competitive, let's push them through. 0:37:29.719 --> 0:37:32.160 It was Trump's for DOJ and FTC that said, wait, 0:37:32.239 --> 0:37:35.239 not so fast. Maybe vertical deals can be harmful and 0:37:35.280 --> 0:37:37.600 maybe we need to rethink this. So I don't really 0:37:37.640 --> 0:37:40.680 see this as going back to the days of the 0:37:40.800 --> 0:37:44.560 very business friendly Republican administrations that we've known. 0:37:45.080 --> 0:37:47.400 Really appreciate this, jen thanks for coming on with us 0:37:47.440 --> 0:37:51.000 on Thanksgiving Day. It's Jennifer Ree, Senior litigation analyst for 0:37:51.000 --> 0:37:54.760 antitrust at Bloomberg Intelligence. Thanks as well to Stephen Shork, 0:37:54.880 --> 0:37:57.359 president of the Short Group, as well as City US 0:37:57.440 --> 0:38:01.560 economist Veronica Clark and Jennifer Lee, senior economist at Demo 0:38:01.719 --> 0:38:04.520 Capital Markets. Thanks to you as well for listening on 0:38:04.560 --> 0:38:07.520 this Thanksgiving holiday. I'm Nathan Hager. I hope you'll stay 0:38:07.560 --> 0:38:09.800 with us because we've got top stories and global business 0:38:09.800 --> 0:38:11.439 headlines coming up right now.